Opposing Post-Judgment Fee. Discrimination Cases*

Transcription

1 Opposing Post-Judgment Fee Petitions in Civil Rights and Discrimination Cases* Robert D. Meyers David Fuqua Todd M. Raskin * Submitted by the authors on behalf of the FDCC Civil Rights and Public Entity Liability Section.

2 I. Introduction A. The American Rule -- No fee shifting B. Exceptions to the American Rule 1. Section 1988 of the Civil Rights Attorney s Fees Awards Act of 1976 ( Section 1988 ) 2. Section 706(k) of Title VII of the Civil Rights Act of 1964 ( Section 706(k) ) ) These sections authorize awards of attorney s fees to the prevailing party in discrimination and civil rights litigation.

3 Purposes of Presentation A. Examine the contours and limits of these fee-shifting statutes. t t B. Consider what employers and public entities can do to limit it exposure to awards of attorney s fees.

4 II. Statutory Language A. Section The court, in its discretion may allow the prevailing party a reasonable attorney s fee in any action or proceeding to enforce a provision of: a. Sections 1977, 1977A, 1978, 1979, 1980, and 1981 of the Revised Statutes [42 U.S.C , , 1986]; b. Title IX of Public Law [20 U.S.C et seq.];

5 Section 1988 (cont.) c. The Religious Freedom Restoration Act of 1993; d. The Religious Land Use and Institutionalized Persons Act of 2000; e. Title VI of the Civil Rights Act of 1964 [42 U.S.C. 2000d et seq.]; or f. Section of the Violence Against Women Act of 1994, 2. Exception: Attorney s fees are not awarded d against judicial officers, unless the officer s action was clearly in excess of such officer s jurisdiction.

6 Section 706(k) A. (k) In any action or proceeding under this title [42 U.S.C. 2000e et seq. (Title VII)] the court, in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney s fee (including expert fees) as part of the costs, and the Commission and the United States shall be liable for costs the same as a private person.

7 Operative Language A. Both Section 1988 and Section 706(k) authorize the courts to award reasonable attorney s fees to a prevailing party. 1. Who is entitled to recover attorney s fees (i.e., who is the prevailing party )? 2. What amount of attorney s fees may be recovered (i.e., what constitutes reasonable attorney s fees )?

8 III. Entitlement to Attorney s Fees: Who is a Prevailing Party? A. Plaintiff as Prevailing Party 1. Fees are awarded as a matter of course to prevailing plaintiffs unless the defendant can demonstrate special circumstances that warrant denial of fees. 2. A finding that the plaintiff is a prevailing party typically results in an award of attorney s fees.

9 Entitlement to Attorney s Fees: Who is a Prevailing Party? (cont.) B. Defendant as Prevailing Party 1. Typically will only recover attorney s fees when the court finds that plaintiff s action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith. 2. Attorney s fees are rarely available for employers and public entities that t successfully defend against civil rights and discrimination claims.

10 The Prevailing Party A. In most cases, it will be evident whether the plaintiff is the prevailing party. 1. For example, a plaintiff will be considered the prevailing party if: a. The plaintiff seeks an amount in damages and recovers most or all of that amount; or b. The plaintiff seeks injunctive relief and obtains the requested injunction.

11 The Prevailing Party (cont.) B. There are some cases, however, in which the issue is not as clear. 1. Who is the prevailing party when: a. The plaintiff is awarded only nominal damages? b. The plaintiff obtains a favorable settlement from the defendant, but no judgment? c. The defendant d voluntarily takes steps to correct its actions after plaintiff files suit?

12 Nominal Relief A. Farrar v. Hobby 1. A plaintiff may be considered a prevailing party if she succeeds on any significant issue in litigation that achieves some of the benefit sought in bringing suit. 2. A judgment, declaratory or otherwise, will constitute t relief, for purposes of Section 1988 if, and only if, the judgment affects the behavior of the defendant toward the plaintiff.

13 Nominal Relief (cont.) 3. A plaintiff prevails when he obtains relief that materially alters the parties legal relationship by forcing the defendant to modify its behavior in some way that directly benefits the plaintiff. 4. A mere judicial declaration that a defendant has violated the law is insufficient to confer prevailing party status on a plaintiff.

14 Nominal Relief (cont.) 6. A judgment for damages in any amount modifies the defendant s behavior for the plaintiff s benefit by forcing the defendant to pay an amount of money he otherwise would not pay. 7. Nominal damages confer prevailing party status but do not entitle a plaintiff to an award of fees.

15 Farrar s Three-Factor Test 1. The degree of success obtained; 2. The significance ifi of the legal l issue on which h the plaintiff prevailed; and 3. The public purpose achieved.

16 Application of the Three-Factor Test 1. Attorney s fees will be awarded if the plaintiff recovers more than nominal damages or obtains other relief that vindicates a significant personal right or serves the public interest. 2. Attorney s fees will be denied when the plaintiff recovers only nominal damages or other relief that does not sufficiently alter the parties relationship or advance the public interest.

17 Advice for Defense Counsel 1. Attempt to minimize the significance of any non- monetary relief 2. Voluntarily modify behavior if doing so will moot plaintiff s claim for declaratory or injunctive relief 3. Compare the plaintiff s demand to the actual amount recovered

18 Settlement and Catalyst for Change 1. A plaintiff is a prevailing party for purposes of Sections 1988 and 706(k) when a settlement agreement is reached that is enforced through a consent decree entered by the court. Maher v. Gagne. 2. Is a plaintiff a prevailing party if the plaintiff reaches a favorable settlement with the defendant or serves as a catalyst prompting the defendant to voluntarily change its conduct, but never obtains a judgment, consent decree, or other form of judicial approval?

19 Settlement and Catalyst for Change (cont.) A. Buckhannon Bd. and Care Home, Inc. v. West Virginia i i Dept. of Health and Human Resources 1. The catalyst theory does not allow a plaintiff to recover attorney s fees under Sections 1988 and 706(k). 2. In cases involving private settlement agreements, attorney s fees may not be available, but the award of fees is not expressly forbidden.

20 Settlement and Catalyst for Change (cont.) 3. Circuits remain split. a. Some courts award attorney s fees based on standalone private settlement agreements. See Roberson v. Giuliani, Truesdell v. Philadelphia Housing Auth., and Barrios v. California Interscholastic Fed n n. b. Other courts have awarded attorney s fees in connection with private settlements. See T.D. v. LaGrange School Dist. No. 102, Christina A. v. Bloomberg, and Smyth v. Rivero.

21 Advice for Defense Counsel 1. Keep settlement agreements private between the parties 2. Avoid having the court formalize the agreement by decree or order 3. Include a waiver of claims for attorney s fees in the settlement agreement or state that the settlement amount includes attorney s fees.

22 Special Circumstances A. If a plaintiff is deemed a prevailing party and recovers more than nominal damages, attorney s fees will likely be awarded as a matter of course, unless there are special circumstances that would render the award of fees unjust. B. Special circumstances may eliminate a fee award or reduce them.

23 Special Circumstances Exception Applied 1. The untimely application for fees by plaintiff s counsel. Mindler v. Clayton County. 2. The unnecessary accumulation of attorney s fees while the Supreme Court considered the dispositive legal issue being litigated by plaintiff. Peter v. Jax. 3. The failure of plaintiff s counsel to maintain reliable, contemporaneous time records. United States ex rel. Averback v. Pastor Med. Assocs.

24 Special Circumstances Exception Did Not Apply 1. Defendant s good faith conduct. Walker v. City of Mesquite. 2. Defendant s reliance on the advice of counsel. Davidson v. Keenan. 3. Plaintiff s ability to pay attorney s fees. Jones v. Wilkinson. 4. The financial burden on taxpayers to pay fees. Copeland v. Marshall.

25 Special Circumstances Exception Did Not Apply (cont.) 5. The routine nature of the case. Jackson v. Pennsylvania Hous. Auth. 6. The fact that the state defendant acted pursuant to federal regulation. Martin v. Heckler. 7. The fact that attorney s fees exceeded the amount of damages. Abrams v. Lightolier, Inc.

26 IV. Calculating the Amount of fa Attorney s Fees A. The court must determine what the universe of possible recoverable fees encompasses. 1. Example: If the plaintiff initiated administrative proceedings with the EEOC prior to filing suit, can the plaintiff recover fees incurred during the administrative proceedings?

27 IV. Calculating the Amount of fa Attorney s Fees (cont.) B. The court must next establish a presumptive amount of fees using the lodestar method, that consists of the reasonable hourly rate multiplied by the number of hours reasonably expended. 1. The lodestar amount is subject to enhancement 1. The lodestar amount is subject to enhancement or reduction depending on the specific facts of the case.

28 Fees for Non-Judicial Proceedings A. Attorney s Fees for the Administrative Stage 1. Plaintiffs are often required to initiate civil rights and discrimination claims with an administrative agency before filing suit in federal court. 2. Whether fees are awarded for the work done at the administrative stage depends on whether the plaintiff subsequently files suit in federal court or resolves his claims at the administrative level.

29 New York Gaslight Club, Inc. v. Carey 1. An award of attorney s fees includes expenses incurred for both state and federal administrative proceedings. 2. The plain language g of Title VII, the broad remedial purposes of the statute, and the express incorporation of state and federal administrative proceedings into the statutory scheme all support the conclusion that prevailing plaintiffs may recover fees incurred at the administrative i ti level. l

30 North Carolina Dept. of Transp. v. Crest Street Comm. Council 1. A plaintiff may not recover attorney s fees if the purpose of his federal suit is only to recover fees and not to enforce the plaintiff s rights under substantive civil rights laws. 2. Attorney s fees for administrative proceedings are only recoverable where the administrative proceedings are part of or followed by a lawsuit on the merits. 3. Plaintiffs can only recover fees for administrative proceedings that naturally piggy-back on subsequent litigation.

31 Advice for Defense Counsel 1. Settle problematic cases at the administrative level in order to preclude plaintiff from filing suit in court and thereby cut off potential recovery of fees.

32 Calculating the Lodestar A. Previous methods of calculating attorney s fees include Johnson v. Georgia Highway Express, Inc. s 12-Factor Test: 1. The time and labor required; 2. The novelty and difficulty of the questions; 3. The skill requisite to perform the legal service properly; 4. The preclusion of employment by the attorney due to acceptance of the case; 5. The customary fee;

33 Calculating the Lodestar (cont.) 6. Whether the fee is contingent or fixed; 7. Any time limitations it ti imposed by the client or by circumstances; 8. The amount involved and results obtained; 9. The experience, reputation, and ability of the attorneys; 10. The undesireability of the case; 11. The nature and length of the professional relationship with the client; and 12. Awards in similar cases.

34 Calculating the Lodestar (cont.) B. The lodestar method replaced the Johnson test t by calculating l a presumptive fee amount by multiplying: 1. The number of hours reasonably expended on the litigation by 2. A reasonable hourly rate. Hensley v. Eckerhart. C. Under the lodestar method, the court makes two reasonableness determinations: the hourly rate and the number of hours expended.

35 The Reasonable Hourly Rate 1. Typically defined as the prevailing rate in the community for similar work. 2. Varies depending on the area in which the litigation occurs. 3. Varies according to who is performing the work. 4. Varies according to the nature of the work performed. 5. Higher rates have been approved for: a. Specialized or complex litigation; and b. Attorneys with notable experience and reputation.

36 Advice for Defense Counsel Reasonable Hourly Rate 1. Compare the requested rate to lower rates awarded in similar litigation 2. Ask the court to expand the geographical area of rates being considered to include areas having lower prevailing rates. 3. Attack the complexity of the work performed. 4. Argue that more junior attorneys or paralegals could have handled much of the work at a lower rate.

37 Hours Reasonably Expended 1. Counsel for a prevailing party should seek to recover only those fees that she would properly bill to a client. Hensley v. Eckerhart. 2. Counsel for the prevailing party has the initial burden, but the burden shifts to the opposing party once sufficient documentation has been provided. 3. The opposing party must adduce specific evidence that certain hours were unreasonably duplicative or otherwise inappropriate. Amer. Petroleum Ins. v. United States EPA.

38 Hours Reasonably Expended (cont.) 4. The mere fact that more than one person worked on a particular task will not necessarily render the work performed duplicative; defendants must show that the task was one that should have been performed by one individual and the other persons working on the task were unreasonably doing the same work. Gates v. Gomez. 5. Plaintiffs may not recover fees for time expended on unsuccessful claims that are unrelated to the successful claims. Hensley v. Eckerhart. 6. Plaintiffs may, at the discretion of the court, recover all fees incurred when the claims involve a common core of facts or are based on related legal theories.

39 Reduction in Fees 1. No specific mathematical model 2. Court may identify specific hours that should be eliminated or simply reduce the award to account for the limited it success. Hensley v. Eckerhart.

40 Advice for Defense Counsel Hours Reasonably Expended 1. Submit special instructions or interrogatories that require the finder of fact to delineate its findings by claim, in order to avoid ambiguity as to which claims the plaintiff prevailed on. 2. Eliminate issues by summary judgment and other pre-trial procedures.

41 Adjusting the Lodestar 1. Once calculated, the lodestar is adjusted only in limited circumstances. 2. Courts may enhance an award where: a. Counsel achieved exceptional success. Blum v. Stenson. b. There was a delay in payment. Missouri v. Jenkins. c. The case was particularly undesirable or unpopular. Barnes v. City of Cincinnati.

42 Adjusting the Lodestar (cont.) 3. Enhancement of the award is rare. 4. The lodestar amount should already encompass most or all factors considered in calculating the award.

43 Offers of Judgment A. In theory, offers of judgment can reduce a defendant s d exposure to attorney s fees. B. In order to limit a fee award, the offer must equal or exceed the plaintiff s award plus fees and costs expended up to the time of the offer. C. An offer of judgment does place additional risk of loss on the plaintiff, particularly in cases where liability is virtually certain.

44 V. Conclusion 1. Broad interpretation of Sections 1988 and 706(k) allows awards of attorney s fees often. 2. Consider the possibility of a fee award when assessing settlement value and formulating litigation strategy. 3. Avoid a war of attrition strategy in civil rights and discrimination suits because of the risk of an exorbitant fee award. 4. Fees often drive settlement because they exceed the plaintiff s damages.

45 V. Conclusion (cont.) 4. Steps to take early in litigation: a. Realistically ll assess the potential ti exposure in the case, including fees; and b. Determine the approach that best serves the client s interests t and goals, c. Including an early settlement or d. Offer of Judgment